Reverse charging mechanism
This query is : Resolved
12 October 2012
Advocate's Services, Security services, Works contract services, Cab services etc., are part of reverse charging of Service Tax.Is it Mandatory that the service recipient should pay the Service Tax Amount?
Or is it acceptable if the Service Provider charges ST and remits to the department in case of the above mentioned Services?. I have this Doubt because a Company does is not paying ST saying that the service provider has already charged ST therefore not paying.
Or is it acceptable if the Service Provider charges ST and remits to the department in case of the above mentioned Services?. I have this Doubt because a Company does is not paying ST saying that the service provider has already charged ST therefore not paying.
MOHAMMAD SALIM
(Expert)
12 October 2012
No as per Section 68(2) of the Finance Act, 1994 read with 2(1)(d)(i) of the Service Tax Rules, 1994, the service recipeient has made made person liable to pay tax and accordingly the same is required to be paid by service recipeint only.
Payment of service tax by service provider does not exonerate service recipeint from payment of service tax under RCM.
Hope this would settle the issue....
Payment of service tax by service provider does not exonerate service recipeint from payment of service tax under RCM.
Hope this would settle the issue....
12 October 2012
Doesn't it amount to double payment of Service Tax to the department?, and, any clarification in this regard is provided?
MOHAMMAD SALIM
(Expert)
12 October 2012
Yes it would amount to... But service recipeint should not pay the service tax amount even if charged by service provider. If paid the same may be recovered from him... For which refund application can be filed by service provider if deposited with govt.
Hope this would suffice...
Hope this would suffice...
12 October 2012
Yes it solved my query, But i have one more query, to avoid such instance, the company (service recipient) has not paid the ST. For Audit purpose, what can be advised the Company?(Service Recipient)
MOHAMMAD SALIM
(Expert)
12 October 2012
Only advise is to pay service tax and recover from service provider if paid to him...
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